If you want tax fairness, then demand real fairness!

Steve Stanek Research Fellow, The Heartland Institute
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How could I have missed this?

Here I have been arguing against the so-called Marketplace Fairness Act, which would force online and mail-order retailers to verify the address of each and every one of their shoppers, determine what the sales tax is where each shopper lives, and then send that money to each shopper’s local taxing jurisdiction.

There are plenty of things wrong with this, but I have only just now realized there is something so right that it overwhelms all the things that are wrong. All across the country, state and local officials and businesspeople have been declaring they favor the bill because it would make online stores collect sales tax on every purchase, as bricks-and-mortar stores must do. This, they say, would result in tax fairness.

So let’s take them at their word and use the Marketplace Fairness Act as the jumping-off point to bring tax fairness to America!

On Thursday in New York’s Newsday newspaper, I read this:

The cities of New Rochelle, Yonkers and Peekskill have given or pledged tens of millions of dollars in breaks in recent years — on sales, mortgage and property taxes — for projects ranging from shopping plazas and warehouses to hotels and apartment buildings. In some cases, cities sign up to back low-interest loans as well, putting taxpayers on the hook if the loans aren’t repaid. The deals are hammered out by industrial development agencies that include both political and business leaders, with broad authority to make things happen.

It is unfair that only some shopping plazas, warehouses, hotels, and apartment buildings receive such “incentives” while others receive none.

It is unfair that a Cabela’s or a Bass Pro Shop receives huge subsidies to move into a community while locally owned and independent sporting goods stores are squeezed for every nickel a state or local government can get from them.

It is unfair that homeowners and other businesses see their tax burdens go up as these politically favored developments have tax money handed to them.

Again from Thursday’s Newsday article:

City Councilman Louis Trangucci pointed out that, although developers with deep pockets have been getting tax breaks, property owners in New Rochelle have seen their taxes increase by 11 percent annually in recent years. That’s not fair, Trangucci said.


“None of these projects are benefiting the taxpayers. We’re only continuing to put ourselves deeper in the hole,” said Trangucci, a Republican.


Trangucci also noted that New Rochelle has had to cut its workforce significantly to plug budget gaps, laying off both public safety and administrative personnel by the dozen, including 40 in the Police Department, to reduce the police force to the current level of 180.

Pain for established businesses and residents; gain for the deep-pocketed newcomers and the politically favored.

So let’s embrace the spirit of tax fairness that supporters of the Marketplace Fairness Act say they have.

This means ending state and local government giveaways to Amazon to build its warehouses, and to Wal-Mart and Target and other big-box retailers to build their stores and distribution centers.

It means treating the smallest businesses with the same respect as the biggest. It means policies that broadly benefit a community instead of policies that continue to raise taxes, fees, and regulations on everyone except the lucky few who are big enough or have the right political connections to have their tax, fee, and regulatory burdens lightened or negated.

If Amazon, Wal-Mart, and other supporters of Internet taxation are willing to publicly declare right now they will never again ask for any special government support for any of their enterprises, then we’d have tax fairness.

So, supporters of Internet taxation, do you stand for real tax fairness? Do you openly declare you stand for ending government incentives that most businesses can never hope to receive?

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute in Chicago.